Let Fq be the finite field with q elements and f, g ∈ Fq[x] be polynomials of degree at least one. This paper deals with the asymptotic growth of certain arithmetic functions associated to the factorization of the iterated polynomials f (g (n) (x)) over Fq, such as the largest degree of an irreducible factor and the number of irreducible factors. In particular, we provide significant improvements on the results of D. Gómez-Pérez, A. Ostafe and I. Shparlinski (2014).Mathematics Subject Classification (2010): Primary 12E05; Secondary 37P05.